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MEDICAL PLAN COSTS TOP $3,500 PER EMPLOYEE IN 1991

 MEDICAL PLAN COSTS TOP $3,500 PER EMPLOYEE IN 1991
 /ADVANCE/ NEW YORK, Jan. 28 /PRNewswire/ -- U.S. employers were hit


with another double-digit increase in the cost of providing traditional medical plans in 1991, a new survey reported.
 Furthermore, with the average total cost of corporate health benefit programs now representing 45 percent of net earnings (after-tax profits), employers are asking employees to shoulder a greater portion of the costs.
 These are among the major findings released today from the sixth annual Health Care Benefits Survey conducted by A. Foster Higgins & Co., Inc., the international employee benefits consulting firm based in New York. The survey, based on responses from 2,409 employers, is considered to be the most comprehensive report on employer-sponsored health care benefits.
 "As the economy worsened and corporate earnings declined, we had expected to see employers take more aggressive action," said John Erb, a Foster Higgins principal and the study's author. "Many employers, however, merely apportioned a greater share of the cost of medical care to their employees. The larger problem remains."
 The cost of indemnity medical plans averaged $3,573 per employee in 1991. This is a 13 percent increase over the 1990 average cost of $3,161 per employee, and is 65 percent higher than the average cost of $2,160 in 1988. Medical plan costs had increased more than 20 percent in each of the previous two years.
 Erb said he believes continued cost pressure on corporate health benefit programs will force more employers to turn to managed care arrangements as an alternative to traditional fee-for-service plans.
 Erb said he expects average costs to exceed $4,000 in 1992. In fact, 30 percent of employers surveyed reported their average cost exceeded $4,000 in 1991.
 Additional Cost Sharing Provisions Reported:
 The Foster Higgins survey reported an increased use of cost sharing measures in 1991 -- primarily larger deductibles and higher out-of- pocket maximum provisions for medical services.
 The median medical plan deductible for individual coverage increased from $150 in 1990 to $200 last year, according to the survey.
 The median out-of-pocket liability for individual coverage was $1,050 in 1991, up from $1,000 in 1990. Employers also raised the out- of-pocket maximum for family coverage from a median of $2,000 in 1990 to $2,100 last year.
 -0- 1/28/92
 /CONTACT: Ed Emerman of Foster Higgins, 609-520-2766/ CO: A. Foster Higgins & Co., Inc., ST: New York IN: SU:


MP-CC -- PH022 -- 3749 01/27/92 12:29 EST
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Date:Jan 27, 1992
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